Tuesday’s budget from the minority Parti Québécois government was surprisingly conservative and austere, to the point where some grumbling might even be heard from social groups, unions and those on the left who make up part of the PQ’s traditional base.

They’ll note that for consumers, electricity rates and taxes on tobacco, beer, wine and spirits will be going up while the business community largely escaped unscathed.

Oh sure, there will be a tax increase on those earning $100,000 or more and higher contributions for upper-income earners to health-care financing.

And there is an extension of a measure that raises revenue from banks and financial institutions — everybody’s favourite cash cow.

But this certainly didn’t read like the radical economic manifesto of a sovereignist party determined to respect its campaign promises.

PQ Finance Minister Nicolas Marceau stalled and backtracked on several election commitments as he held tightly to the objective of a balanced budget in the next fiscal year.

The prudence is wise, given the shaky state of the global economy and the worrying growth in Quebec’s total public-sector debt, which now eats up $10 billion in debt service costs a year.

The agencies that rate Quebec bonds would not have stood for anything too wild and woolly in this budget. A credit downgrade would have made borrowing more expensive for the government at a time when financial markets are skittish about government debt worldwide.

“My biggest concern was the government might deviate significantly from a credible fiscal framework,” said Stéphane Marion, chief economist at National Bank of Canada.

Instead, Marion was impressed at the ambition this government has mustered to cut spending growth in a variety of ways.

He noted that the budget is cutting back on costly spending for infrastructure projects to the tune of $1.5 billion.

The overall goal, to hold spending increases to 1.8 per cent next year and 2.4 per cent the year after, is extremely aggressive when you consider how many previous governments have tried and failed to slay the spending beast.

Old habits die hard. In the current year, the finance minister said he is “shocked” that the outgoing Liberal government has left him with spending that is already over budget by $1.1 billion.

But the political rhetoric aside, this government seems to understand it has no other choice in the current context than to tackle spending.

Provincially-owned Hydro-Québec will have to cut 2,000 jobs while a list of government agencies and departments will also see reductions.

The National Bank’s Marion was relieved that the new government is keeping the Fonds des Générations, the fund created by the Liberals to pay down the provincial debt, and that it will continue to contribute to it.

Laurentian Bank Securities’ chief economist Carlos Leitao said the budget’s assumptions for growth of 0.9 per cent this year and 1.5 per cent next year are credible and the spending restraints, while ambitious, look achievable.

The business community, which feared the worst when the PQ was elected in September, seemed relieved.

Montreal Board of Trade president Michel Leblanc commended the government for its “rigour and responsibility” in sticking to the balanced budget target, but fretted that the go-slow policy on public infrastructure could hurt the Montreal economy.

A new agency announced in the budget, the Banque de développement du Québec, should direct its efforts at retaining head offices in the city, Leblanc said.

Conseil du patronat president Yves-Thomas Dorval said the budget delivered a message that “Quebec is a place where there are still good conditions to invest.”

But he questioned whether the spending reductions can be achieved and he lamented the absence of critical decisions such as what the PQ intends to do about its promise to raise royalties on the mining industry.

Peter Buchanan of CIBC Economics pointed out that the budget has built in some safeguards against adverse economic developments.

The budget projection for 2013-14 includes an enlarged $400-million contingency reserve, rising to $500 million in 2014-15.

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